Our food and agribusiness industry webinar held on 17 November brought together over 300 industry participants to explore the opportunities ahead as we look to 2021.
Following 18-months of a challenging operating environment impacted by prolonged drought, floods, bushfires and more recently with COVID-19, the industry has had to adapt and respond to accelerated disruption in a way that couldn’t have been imagined for both our domestic and export market focused businesses. Notwithstanding these challenges, they have also provided significant opportunities for businesses who have been able to respond quickly and capitalise on immediate upsides.
About the webinar
The webinar was hosted by KPMG’s food and agribusiness leaders Robert Poole and Georgie Aley, along with KPMG Australia’s Chief Economist Dr Brendan Rynne who provided an update on the overall economic outlook. The session included special guest Rob Gordon, Chief Executive Officer for leading Australian food brand, SunRice.
As one of the largest rice food companies in the world and one of Australia’s leading branded food exporters, SunRice has not been immune to the challenges faced by the sector over the last 18-months. SunRice is a diversified business leveraging its direct access to Australia’s key Riverina rice growing region, as well as multiple global supply sources serving an increasing portfolio of products and consumers both in Australia and overseas. As a business employing approximately 2000 employees across multiple ventures, they have more than 30 major brands in around 50 countries across the world, with SunRice’s operations and assets spanning Australia, New Zealand, the Middle East, the United States, Papua New Guinea, the Pacific Islands and Asia.
Rob shared his reflections with industry attendees on life pre-COVID-19, especially how the prolonged drought and limited to access to water have impacted their operations in the Riverina. Rob provided observations around leading a business like SunRice through the challenges of a global pandemic, with challenges further exacerbated by the closure of key markets borders and rice export bans from key supply countries. He also noted how a company like SunRice responded to panic buying and a 200 percent spike in demand overnight. In light of all of this, Rob remains positive about the outlook ahead and the opportunities Australian food and agribusinesses have in meeting the changing customer demands that have been accelerated and heightened in response to COVID-19 and ongoing uncertainty.
Also sharing their insights during the breakfast was Dr Brendan Rynne, KPMG Australia’s Chief Economist, who discussed the current economic outlook for Australia and the food and agribusiness sector more specifically. He touched on what the outcome of the recent US Election will have on the sector, considerations around ongoing trade and foreign exchange, as well as the latest from ABARES on the outlook for commodities.
Key takeaways from the session
- World markets remain dislocated with the food and agribusiness sector having not been immune to either COVID-19 or geopolitical tensions.
- Working assumption is that a vaccine will be found in 2020 Q4/2021 Q1, and rolled out over the next two years.
- Given the recent impacts on the global economy being so severe, it will take some time for trade patterns to recover especially in light of broader geopolitical challenges.
- As a result of COVID-19, SunRice experienced increased demand for many retail products, in some cases more than 200% of forecasts due to changes in consumer shopping patterns. Sudden spike in demand exceeded existing levels of supply, requiring significantly ramped up production.
- SunRice shared the impacts of export restrictions on rice imposed in Cambodia and Vietnam, highlighting Australia and SunRice’s key role in providing food security for Pacific Island Nations.
- Notwithstanding the recent challenges of drought and COVID-19, SunRice are continuing to leverage a strong balance sheet to pursue and integrate value-accretive merger and acquisition opportunities across the Group, while their innovation pipeline remains strong.